The ABCs of Real Estate Investing is a well-loved book, proven by its 4.6-star rating on Amazon.
If you’d rather not read thousands of its glowing reviews, you might enjoy my take on this reputable read.
In this ABCs of Real Estate Investing book review, I’ll give you a gist of it.
Plus, I’ll tell you what it has imparted to me.
Let’s get started.
Who Is The Author?
Ken McElroy is an esteemed multi-family investor in the Western United States.
His involvement with Robert Kiyosaki’s Rich Dad program and books has expanded his visibility and public image.
He penned “The ABCs of Real Estate Investing: The Secrets of Finding Hidden Profits Most Investors Miss.”
It’s an excellent introduction for aspiring real estate investors, particularly those interested in apartment complex potential.
Related Reading: How To Make Money In Real Estate – Click Here To Make Money Now.
A Summary of The ABCs of Real Estate Investing
There are some prevalent myths about real estate investing.
Many believe that you must be wealthy. Some say that big deals are too risky, so start small.
Others think that flipping houses or investing with no money will get you rich.
Another myth is that some people are naturally lucky while some are exceptional negotiators.
Setting a goal is the first step toward achieving anything worthwhile.
So, for your real estate investment firm, create a plan and break it down into smaller milestones to get there.
Also, have someone keep you accountable to complete it.
Then tell others about it for added pressure to follow through.
Having a team is far better and more profitable than going alone in the long term.
A business team should include:
- An attorney
- An accountant
- A property search team (property manager and broker)
- A lender
- An investor
- A contractor
Online research, face-to-face meetings with government personnel, and thorough talks with informed community members are all ways to explore potential properties.
It would also help to go through property walkthroughs.
In the market for your property, look for supply and demand.
Some benefits to look for in your home are stable employment, a robust local economy, schools, and a large population.
You want to make sure that the property gets substantial drive-by traffic.
Never buy a house that you haven’t viewed or haven’t spent a lot of time studying.
Choosing an investment property is similar to dating.
Because you will be investing time, energy, and money, you want to make sure you make the best decision possible.
Reduce your search to a submarket and be very specific about the type of house you’re looking for.
To generate a profit, it must be in the appropriate location, at the right price, and with the proper expectations.
The importance of preparation cannot be overstated.
When you evaluate property income, expenses, and net operating income, you’ll know whether to buy or pass on a property.
You also have to consider the capitalization rate and valuation and compute the loan payment and profit.
Never accept a seller’s offer at face value.
Make your calculations to evaluate if the deal is profitable.
Once you’ve found a property you want and the economics add up, move quickly to obtain a letter of intent.
It’s critical to seal the deal right away.
It’s unthinkable to disregard the importance of doing your homework.
You must go through each paper, walk through each unit, and pay attention to every detail (good or bad).
If you discover faults that were not reported, the seller is responsible.
To preserve residency and income flow, always treat your residents with respect and immediately resolve their issues.
If you don’t want to do this job round-the-clock, employ a property management business.
When done correctly, real estate investing may offer you incredible financial freedom and the lifestyle of your dreams.
TLDR: A Short Summary
The only thing you need to concentrate on is locating the proper offer to profit from.
Don’t believe you need personal wealth or that you must start small.
It would help if you also didn’t think that you must be a real estate genius to get started.
Search for hidden gems.
I’m talking about undervalued properties and businesses that aren’t bringing in as much money as they should be.
When the market or you correct your course, there will be plenty of money left over.
You, the bank, and your investors won’t be disappointed.
Related Reading: How To Find Great Real Estate Deals – Click Now To Learn.
My Take On The ABCs of Real Estate Investing By Ken McElroy
The book adopts a broad, high-level approach, which is both its strength and weakness.
It covers the majority of the critical stages and factors to consider when selecting, acquiring and operating commercial and residential properties.
As a result, it’s a fantastic place to start gathering ideas and making plans.
However, you’ll need to go on to other publications to dig into the nitty-gritty details.
It doesn’t have detailed how-tos, case study-based considerations, and risk mitigation measures.
The book begins with core building elements that are important to a real estate investor’s long-term success, which is:
- Determining your own particular objectives and strategy
- Forming a competent and trusted local team
- Market research and selection
- Selecting the optimal property types in the market
McElroy does a fantastic job of addressing these facets.
He doesn’t just dive into the standard book technique of uncovering a killer deal and allegedly maximizing profits.
McElroy then goes into detail on the property selection, letter of intent (LOI), purchase and sale agreements, and financing.
He spends a lot of time on due diligence too.
He gives you a decent broad framework of topics to explore and address.
Please note that the due research required for many properties goes beyond his broad checklist method.
However, it is still an excellent place to start.
The author owns a significant property management company and understands the value of competent property management.
So, he focuses a substantial amount of text on vetting, monitoring, and outlining expectations with a property management company.
He discusses the accompanying tasks in broad terms for those investors who want to self-manage a property.
However, he prefers to use a professional property management company for commercial reasons.
The book concludes with long-term ideas.
He covers topics like the advantages of buying and holding.
He explains that one should keep in mind that there may be a future opportunity to sell for a profit.
Overall, “The ABCs” is a quick read that I would suggest as an introduction to any aspiring real estate investor.
There isn’t much in-depth here for more experienced investors, so it’s more of a refresher on the fundamentals.
Related Reading: How Exp Realty Works – Check Out Here.
Final Thoughts: My Takeaways For You
If real estate investing isn’t your thing, all I can suggest is investing in the stock market through index funds.
You must invest your money in some way, or you will be financially disadvantaged.
If real estate investing is a top priority for you, you should get started right away.
Researching properties and their finances is entirely free.
It’s completely free to speak with people and government officials to learn about the market and prospective properties.
Signing up for real estate emails is completely free too.
Start assembling your real estate team because attempting to close a large transaction alone is not worth it.
Also, purchase this book to learn the specific tactics for making offers and ensuring a profitable deal.
The goal is to increase revenues once you’ve set them up.
Over time, you’ll gain confidence and experience. But only if you make this a top priority and take action.